CFTC Issues Final Retail Forex Rules

On August 30, the Commodity Futures Trading Commission (CFTC) announced the issuance of its long-anticipated final rules for off-exchange foreign currency transactions (forex) with retail customers.¹ The rules implement the CFTC Reauthorization Act of 2008 (the CRA),² which for the first time gave the CFTC complete rulemaking authority over forex transactions between certain counterparties and retail customers.³ The rules are also the first final rules published by the CFTC to implement part of the Dodd- Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), which required that the CFTC issue rules regarding retail forex within 90 days.⁴ The rules apply to retail forex transactions that are offered or entered into by entities that are solely registered with the CFTC under the Commodity Exchange Act (the CEA). The rules become effective on October 18, 2010.